Highways ministry may get lower allocation in budget

The roads ministry is struggling to meet its construction targets for this fiscal year as environmental and forests clearances have delayed projects. Photo: Hindustan Times

New Delhi: The ministry of road transport and highways has sought Rs.26,000 crore in budgetary allocation for the year starting 1 April, 13% more than it was allocated in the current fiscal year, according to a ministry official who declined to be named.

The ministry was allocated Rs.23,000 crore in March last year for the year to 31 March, but the finance ministry is likely to revise the estimate to Rs.18,300 crore when it presents the budget for the next fiscal, according to the official.

“While the roads ministry has sought Rs.26,000 crore for plan expenditure in fiscal year 2014, it is likely to receive a lower allocation,” said another government official familiar with the matter, requesting anonymity.

The roads ministry is struggling to meet its construction targets for this fiscal year as environmental and forests clearances have delayed projects.

C.P. Joshi, minister of road transport and highways, said the government will not be able to meet the target to bid out 9,500km of roads in the year to 31 March. “So, I have asked my officials that though awards is not completely in your hands but construction is,” he said.

Joshi has asked officials in his ministry to identify issues that are delaying building of roads and meet the construction target for the year. “We will try our best to do as much possible. Internally, we think we will be able to call for bids for 4,000km more this year,” the roads ministry official said. The ministry has so far awarded 1,010km for road construction. “Lower awards this fiscal will mean lower road construction in the coming years,” the official said. Besides, the ministry has built only around 3,300km of roads so far this fiscal year against the target of 6,000km, he added. The roads ministry’s third-quarter performance report shows it has significantly fallen short of its targets, especially with regard to the awards given. Total projects awarded between October and December were 13% of the actual target, it shows.

Mint has reviewed a copy of the report, which was submitted to the Planning Commission recently.

“This fiscal’s performance has to be seen in the context of delays in land acquisition, obtaining environmental clearances and difficult market conditions,” said Amrit Pandurangi, senior director at Deloitte Touche Tohmatsu India Pvt. Ltd. “The next fiscal’s requirement is reflective of their next year’s plans and completing their own construction activities that the ministry could not this year.”

National Highways Authority of India has, however, completed nearly 1,600km of highways, or 76% of its 2,100km target, in the third quarter. “Delays in approvals have made lenders more cautious about lending to road projects,” said M. Murali, director general of National Highways Builders Federation, an industry lobby group that represents builders.